Banks Bid more of 7-Day Tenor in Auction of Forward Forex Rates.

The 7-Day Tenor dominated the bids submitted by banks for the forward forex rates auction held by the Bank of Ghana on November 3, 2020.

Out of a total of 109 bids submitted by banks, 54 of them were 7-Day Tenor.

This indicates that the 7-Day Tenor alone made up almost half of the total bids submitted, bringing in approximately 49.5 percent of total bids submitted by the banks.

The number of bids accepted out of the total of bids submitted summed up to 31. Except for the 75-Day Tenor, which received no bids, all the other Tenor recorded their bids accepted to be lower than the bids submitted by the banks, the report added.

Again, even though the banks submitted up to 54 bids for the 7-Day Tenor, only 17 got accepted. In a similar vein, only a fraction of the bids submitted for the 15-Day Tenor were accepted, with only 10 bids being accepted out of the total of 39 bids submitted. The 30-Day and 45-Day Tenors also had only 3 and 4 bids accepted, out of 10 and 4 bids submitted respectively. Additionally, 2 bids submitted for the 60-Day tenor were rejected.

Out of the US$83.5 million worth of bids submitted, only US$25 million worth of bids were accepted, in keeping with the stipulated target.

Thus, the bids cover ratio hovered around 3.34×, meaning that the worth of total bids submitted was up to 3.34 times the stipulated target set by the Bank of Ghana. This exceeds the previous ratio of 3.08×, the Bank of Ghana mentioned.

A breakdown of the bids submitted by the banks provided in the report showed that except for the 15-Day tenor which came close to the 7-Day tenor by recording 349bids, all the other Tenor recorded very low levels with 30-Day tenor recording 10, the 45-Day tenor logging in with 4, and then the 60-Day Tenor coming in with 2. 

The Bank of Ghana intimated that the 15-day tenor logged in the highest range of rates for bids accepted, reaching between 5.8010 and 5.8075, and for the range of rates for bids submitted, the 30-Day tenor recorded the highest minimum rate of 5.7925, and again the 15-Day tenor recorded the highest maximum rate of 5.8075. The remaining tenors also recorded a similar but marginally smaller range of rates. For example, the 7- day tenor had a range of rates for bids submitted extending from approximately 5.78 and 5.8050 while its range of rates for bids accepted lay between about 5.7860 and 5.7925. 

The 60-Day Tenor had no range of rates for bids accepted because none of the bids submitted got accepted.

It must be noted that some bids were considered null and void. They were represented in the chart as invalid bids submitted, and as such, rendered inadmissible because they “did not meet the forex forward auction guidelines”, the Bank of Ghana opined. The total number of bids ruled as invalid were worth a total of US$750,000.